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Sugar Has Biggest Weekly Gain Since October on Thailand Supply Concerns
Sugar rose, capping the biggest weekly gain since October, on signs of rising demand and on speculation that a supply shortfall may worsen because of antigovernment protests in Thailand.
Protests spread in Thailand, second only to Brazil as a sugar exporter, after a military battle with demonstrators in Bangkok left 15 people dead earlier this week. Purchases by India, the largest sugar consumer, as well as Pakistan, China and Russia, signaled increased demand, said Bruno Lima, a risk- management consultant at FCStone Group Inc. in Campinas, Brazil.
“In addition, conflicts in Thailand have delayed white exports, and this kind of sugar is completely rare in the market,” Lima said today in an e-mail.
Raw sugar for July delivery rose 0.66 cent, or 4.4 percent, to 15.65 cents a pound on ICE Futures U.S. in New York. The price is up 11 percent this week, the biggest weekly gain for the most-active contract since Oct. 16.
In London, white, or refined, sugar futures for August delivery rose for a fifth day on the Liffe exchange, gaining $14, or 2.9 percent, to $503.70 a ton. The most-active contract is up 8.1 percent for the week, the biggest weekly advance since Dec. 18.
Through May 7, raw sugar tumbled as much as 57 percent from a 29-year high of 30.4 cents on Feb. 1, partly as importers slowed purchases. Dwindling inventories and lower prices will revive demand, according to Peter Baron, the executive director of the International Sugar Organization.
Price decline ‘exaggerated’
“There will be restocking by some countries,” Baron said earlier this week. “Just like the steep rise was not warranted, the fall has also been exaggerated.”
Most traders and analysts surveyed by Bloomberg said sugar will rise next week.
Selling in raw sugar “may have been too much, too quickly, and is therefore due for a slight upward correction,” said Nicole Thomas, a commodity analyst for McKeany-Flavell Co., a consulting company and brokerage in Oakland, California. “We’re still in a tight refined-sugar situation globally.”